What Happens Next to Health Insurance

We've already seen the first fall out during this years Open Enrollment period. Individual medical insurance carriers terminated Preferred Provider Organization (PPO) contracts and replaced them with more cost effective solutions for them (the insurance companies) with HMO and EPO contracts. The lack of managed care network access created a considerable burden to insureds who's doctors are no longer in networks, and worse, no longer covered.

The provider market fired their shot across the market place bow when hospitals like University of Texas Medical Center in Dallas announced they would no longer accept payment from "Obama Plans". Let me bring that into perspective: they no longer accept any and all individual medical insurance plans written after 1/1/2014. Other medical facilities, like Baylor Cancer Center followed suite. The explanation of why this happened is very long, but bottom line, it is because of provisions in the Affordable Care Act that created extreme financial liabilities to those providers.

The next shot was fired by the insurance carriers, again, and this time cutting commissions to agents by 50%. Assurant Health announced they would not longer pay commissions for the sale of new products. Last week Humana announced they were cutting individual medical commissions to agent to 3%. At that rate, I know I will not be selling there products.

Rumors are already floating around about the next natural progression in this market, and that is cancelation of coverage by individual medical carriers. All of the market reactions noted above, are to save cost due to increased economic liability/cost attributable to the Affordable Care Act. Unfortunately, these same reactions will cause long term losses which, will eventually require companies to discontinue these unprofitable lines of coverage. Paraphrased: No more individual medical coverage.

This ship can be turned around by:

• Repealing the ACA
• Mandating reasonable coverage requirements by the National Association of Insurance Commissioners including; coverage for pre-existing conditions, higher risk retention plans for consumers, and coverage for out-of-network providers 
• Removing unreasonable bureaucratic burdens restricting new healthcare provider models like doctor owned hospitals
• Create a separate "Medicare-Lite" program for under age 65 that cannot afford actuarially required premiums, but are required to contribute based on income.
• Flat tax so everyone is contributing to the welfare of the nation

There are a lot of details for the bullets above to work but it is an alternative solution to something that isn't working now and a solution to what wasn't working before that.

Competition is what keeps the open market honest and competitive.